Richard Branson explains his 10 rules for being a great leader

Portfolio Virgin Group chairman Richard Branson has spent his entire career pushing the envelope.

It's resulted in an eclectic and expansive set of companies under the Virgin name, including airlines, a bank, and most recently a hotel chain. He's a self-made billionaire who dropped out of high school and hasn't stopped doing things differently for the past 45 years.

Though he's well-known for his penchant for pranks, his costumes, and his private island, he's built an empire and survived countless setbacks thanks to his commitment to being an exceptional leader.

In his book "The Virgin Way," Branson breaks down the top 10 rules that have motivated him and his employees every step of the way.

We've explained them below.

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1. Follow your passions, but protect the downside.

Sir Richard Branson.
David McNew/Getty

Branson has never been someone to back down from an idea because others criticized him for it, and admires those who take the risk on something extraordinary.

He uses the investing term "protecting the downside" to describe this limiting of risk, and it's how he convinced his business partners to join him in making the huge leap into the airline industry in 1984. They could trust him to pursue this seemingly ridiculous idea since he got Boeing to agree to take back Virgin's one 747 jet after a year if the business wasn't operating as planned.

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2. Do some good.

Branson runs alongside the Virgin team in the 2010 London Marathon.
Christopher Lee/Getty

Branson's a firm believer in philanthropy and has signed Bill Gates' and Warren Buffett's Giving Pledge, a promise to donate at least half of his fortune to charity.

He recommends charitable works as a great way to unite employees, and it's why he gets large groups of Virgin employees to run the New York and London marathons to raise money for their favorite charities.

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3. Believe in your business.

"A passionate belief in your business and personal objectives can make all the difference between success and failure. If you aren't proud of what you're doing, why should anybody else be?" Branson writes.

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4. Have fun.

Branson has a love of extreme sports.
Wikimedia Commons

Branson says that the heart that unites all of the disparate companies under the Virgin name is a dedication to fun. "Fun is one of the most important — and underrated — ingredients in any successful venture. If you're not having fun, then it's probably time to call it quits and try something else," he writes.

5. Don't give up.

Branson is always in pursuit of a difficult challenge to overcome, and with these risks come failures.

There have been flops like Virgin Cola and failed businesses like the Virgin Megastore, but he's also had to deal with catastrophes like last November's Virgin Galactic test flight crash, in which the copilot died and the pilot was gravely injured.

He says it has become his secret weapon as a businessman, since he is constantly making note of what others say, in addition to jotting down ideas as soon as they come to him.

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7. Make room for personal time through delegation.

Sir Richard Branson and his daughter Holly Branson pose for a picture during the 2011 London Marathon.
Warren Little/Getty

"The art of delegation is one of the key skills any entrepreneur must master," Branson writes. The most successful leaders know that they do not have the time or learning capacity to excel at every aspect of their company and thus hire people to take care of things they're either not good at or should not be wasting time on.

"It also gives you time to spend with your family, which is really the most important thing of all," he says.

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8. Go out and meet people.

Branson receives a present during a ceremony where he was installed as a Maasai elder in the Maasai Mara national park, southwest of Nairobi, in 2007.
Thomas Mukoya/Reuters

Don't be someone who gets stuck in front of a computer all day. Push yourself to get lunch with coworkers; grab coffee with someone in your industry.

You'll have no chance of rising through the ranks or getting your own company recognition if you don't actively build relationships in person, Branson says.

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9. Communicate among all levels of your company.

Branson and Virgin Money CEO Jayne-Anne Gadhia pose at the first Virgin Money branch, in Newcastle, England, in 2012.
AP

Branson doesn't believe in barriers between levels of employees, and thinks a CEO should never forget that they are defined by their team.

He points to the Pixar campus, which is designed to make it easier for employees from different parts of the company to run into each other, allowing for the chance of an exciting new collaboration to arise.

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10. Be happy.

Branson is a tough business leader, but he prefers the lighter side of life.
Michael Buckner/Getty

To Branson, his $5 billion net worth wouldn't mean anything if he didn't actually enjoy what he was doing. He sees success as a constant pursuit and indulgence of happiness. It's why he has his own private island.

But, he writes, "as long as you are surrounded by the people you love and doing what you love, it really doesn't matter where you are."